Thursday, March 06, 2008

Bubblology or Bandwagonology: A brief analysis of the human psyche

Everyone loves a "get rich quick scheme." At least, I do.

So, it's a natural human tendency to look for momentum, and figure out how to capitalize on it. The trouble with most people, however, is the delusion that momentum lasts forever, when it doesn't. Delusions of grandeur cloud judgement. Exit strategies go by the wayside. The tech and the real estate bubbles are the examples.

And now, there's a gold and commodities bubble. They definitely offer a moment in time where the potential to make a ton of money is there. So, my question is, "How do you trade oil, gold, or corn futures?"

Also, I'm not saying you can't make money in real estate or the stock market anymore. I'm just they aren't what's hot right now, and you have to be really smart--all the idiots have been wiped out.

For a long time, I dismissed Jim Cramer (Smart Money on CNBC) because I don't particularly like it when someone throws out 100 recommendations a day, and I still don't. I just take what he say with a grain of salt. But, the one thing I like about Cramer is he's good at "telling the story" of what's going on in our economy, and how you can make money from all it's twists and turns. He's obsessed, and I like it--there's always a golden opportunity somewhere. So, you want obsession in an advisor because the market is constantly changing. It shifts, and like a game of musical chairs, it's easy to be the odd man out--No one wants to be that guy.

Moreover, the hardest part of trading stocks is figuring out when a stock is "over bought and over sold." I've made 4 times more money "on paper" than I've taken out of the market--the stock went up, and I still hadn't sold when it came back down. There's no worse feeling than the feeling of "the money you could have made."

It never works where you're happy you held on because the stock is still going up. People are greedy, they want their money, and they want it now. Stocks fall 10 times faster than they go up. So, they sell, and it drives down the price quickly. Inevitably some joker is there to jump on the bandwagon only they're "a day late and a dollar short." So, instead of a 50% profit, you make a 10% profit, or you lose your shirt, and you feel like a chump.

I was following Apple when the news of the iphone came out 6 months prior to its release. It was $80 bucks a share. You might of heard the expression "buy on rumor, and sell on news," or variations of that. Well, I was telling my trader friends that this stock is about to take off like a rocket, and it sure did.

The Apple scenario was one where I would have said, "sell the farm, and load up." Why?? It's simple; no one wants to work forever. If the market presents a golden opportunity, which it does about once or twice a year, why not "jump on the bandwagon" and take full advantage of your foresight--that's why you became interested in the stock market in the 1st place, but recognize--bubbles and bandwagons don't last forever. Apple's back down from $200 a share to about $130. You'd still be up about 70%, if you bought the stock outright at $80.

But, why bother buying it outright, when instead of 70% you can make 1000% trading options. I know, I'm a gambler, but then again, who wants to work forever?

So, my fascination is finding "the perfect storm of opportunity" and positioning myself to be the big winner. It happens yearly, only thus far, I've haven't fully capitalized on one of my hair brained schemes, but mark my words, I will. It's the eternal optimist in me that says--the next golden opportunity is right around the corner. That's always the case. So, I'm always learning, watching, and scheming. Every now and then I place a trade.

Sirius Satelite
American Airlines

These are just a few that I was following and trading, and I could have or did make money on--in all cases, however, I didn't make as much money as I could have made, but I did learn some things.

Wednesday, March 05, 2008

My question about oil and Iraq

The largest oil consumer, the U.S., invades the 3rd largest reserves, Iraq, and the price of gas doubles?? I don't understand why?

Shouldn't the price of gas and oil be going down due to an increased supply?

I feel like this is an 800lb. gorilla in the room that hasn't really been addressed. It's been more than 4 years since we invaded--wouldn't the floods gates be wide open at this point?

Tuesday, March 04, 2008

French National Anthem (plus translation)


1. Allons enfants de la Patrie,
Le jour de gloire est arrivé !
Contre nous de la tyrannie,
L'étendard sanglant est levé !
L'étendard sanglant est levé !
Entendez-vous dans les campagnes
Mugir ces féroces soldats ?
Ils viennent jusque dans nos bras
Egorger nos fils et nos compagnes !

Aux armes, citoyens !
Formez vos bataillons !
Marchons ! marchons !
Qu'un sang impur
Abreuve nos sillons !

2. Que veut cette horde d'esclaves,
De traîtres, de rois conjurés ?
Pour qui ces ignobles entraves,
Ces fers dès longtemps préparés ?
Ces fers dès longtemps préparés ?
Français, pour nous, ah! quel outrage !
Quels transports il doit exciter !
C'est nous qu'on ose méditer
De rendre à l'antique esclavage !

3. Quoi ! ces cohortes étrangères
Feraient la loi dans nos foyers !
Quoi ! ces phalanges mercenaires
Terrasseraient nos fiers guerriers !
Terrasseraient nos fiers guerriers !
Grand Dieu ! par des mains enchaînées
Nos fronts sous le joug se ploieraient !
De vils despotes deviendraient
Les maîtres de nos destinées !

4. Tremblez, tyrans et vous perfides,
L'opprobre de tous les partis,
Tremblez ! vos projets parricides
Vont enfin recevoir leurs prix !
Vont enfin recevoir leurs prix !
Tout est soldat pour vous combattre,
S'ils tombent, nos jeunes héros,
La terre en produit de nouveaux,
Contre vous tout prêts à se battre !

5. Français, en guerriers magnanimes,
Portez ou retenez vos coups !
Epargnez ces tristes victimes,
A regret s'armant contre nous.
A regret s'armant contre nous.
Mais ces despotes sanguinaires,
Mais ces complices de Bouillé,
Tous ces tigres qui, sans pitié,
Déchirent le sein de leur mère !

6. Amour sacré de la Patrie,
Conduis, soutiens nos bras vengeurs !
Liberté, Liberté chérie,
Combats avec tes défenseurs !
Combats avec tes défenseurs !
Sous nos drapeaux, que la victoire
Accoure à tes mâles accents !
Que tes ennemis expirants
Voient ton triomphe et notre gloire !

7. Nous entrerons dans la carrière
Quand nos aînés n'y seront plus;
Nous y trouverons leur poussière
Et la trace de leurs vertus.
Et la trace de leurs vertus.
Bien moins jaloux de leur survivre
Que de partager leur cercueil,
Nous aurons le sublime orgueil
De les venger ou de les suivre !


1. Arise children of the fatherland
The day of glory has arrived
Against us tyranny's
Bloody standard is raised
Listen to the sound in the fields
The howling of these fearsome soldiers
They are coming into our midst
To cut the throats of your sons and consorts
To arms citizens
Form you battalions
March, march
Let impure blood
Water our furrows

2. What do they want this horde of slaves
Of traitors and conspiratorial kings?
For whom these vile chains
These long-prepared irons?
Frenchmen, for us, ah! What outrage
What methods must be taken?
It is we they dare plan
To return to the old slavery!

3. What! These foreign cohorts!
They would make laws in our courts!
What! These mercenary phalanxes
Would cut down our warrior sons
Good Lord! By chained hands
Our brow would yield under the yoke
The vile despots would have themselves be
The masters of destiny

4. Tremble, tyrants and traitors
The shame of all good men
Tremble! Your parricidal schemes
Will receive their just reward
Against you we are all soldiers
If they fall, our young heros
France will bear new ones
Ready to join the fight against you

5. Frenchmen, as magnanimous warriors
Bear or hold back your blows
Spare these sad victims
Who with regret are taking up arms against us
But not these bloody despots
These accomplices of Bouillé
All these tigers who pitilessly
Are ripping open their mothers' breasts

6. Sacred Love for the Fatherland
Lead and support our avenging arms
Liberty, cherished liberty
Join the struggle with your defenders
Under our flags, let victory
hasten to you virile (or manly) force
So that in death your enemies
See your triumph and our glory!

7. We shall enter into the pit
When our elders will no longer be there
There we shall find their ashes
And the mark of their virtues
We are much less jealous of surviving them
Than of sharing their coffins
We shall have the sublime pride
Of avenging or joining them